The Law to Regulate Financial Technology Institutions, which was published in March 2018, allows the National Insurance and Bonding Commission (CNSF) to authorise companies to establish start-ups to operate 'novel models' (ie, tools or technological media that do not exist in the market and help in the rendering of financial services).

As such, the CNSF recently amended the Sole Insurance and Bonding Rules to include the process for securing a temporary authorisation to operate as a regulated company in the insurance sector using technologically novel models.

Parties that are interested in operating novel models in insurance matters must request an authorisation from the CNSF. An authorisation will be valid for up to two years and can be renewed for up to one additional year. The authorisation process aims to allow start-ups to offer and test novel models without having to fully comply with the applicable legal framework. This will allow them to better predict the success of the model without incurring the costs that are involved in securing and operating a fully authorised regulated entity.

During the term of its authorisation, a novel model will be expected to be converted into a fully financially regulated entity; otherwise, the CNSF will cancel the authorisation.

In order to secure an authorisation, companies that intend to operate a novel model must comply with different requirements, including providing information on:

  • the novel model;
  • the technological infrastructure that will be used;
  • the applicable business model;
  • the target clients (which must be limited);
  • the novel model's corporate structure and governance; and
  • evidence that the novel model is ready for immediate operation.

If approved, companies which operate novel models will be allowed to operate without having to meet specific obligations which apply to regulated financial entities. An authorisation granted by the CNSF will specify the obligations that a company will be exempt from fulfilling, which will be different from those of an insurance or bonding institution.

To date, no companies have been denied a temporary authorisation.

For further information on this topic please contact Carlos Ramos Miranda at Hogan Lovells BSTL SC by telephone (+52 55 5091 0172) or email ([email protected]). The Hogan Lovells BSTL SC website can be accessed at